The impact of green transformation in data centers on corporate carbon emission reduction: empirical evidence from China

Abstract

Carbon emission reduction is a critical objective for enhancing ecological and environmental quality. The shift toward green and sustainable practices is becoming increasingly central to the future development of data centers. Despite its importance, few studies have examined the impact of green data centers on carbon emissions. Based on the event of green data center pilots at district-county level in China, this paper explores the impact of green transformation of data centers on corporate carbon emission reduction and its mechanism of action by using a high-dimensional fixed-effects model with the help of a panel data of A-share listed companies in Shanghai and Shenzhen, China, from 2008 to 2021. The findings reveal: (1) The green transformation of data centers significantly promotes corporate carbon emission reduction. This result is robust, persisting even after adjusting for the influence of other policies and benchmark variables. (2) The study identifies that green transformation substantially enhances the level of breakthrough innovation within enterprises, which in turn significantly reduces their carbon emissions. Additionally, the level of green concern within a company positively moderates the relationship between green transformation and carbon emission reduction. (3) Heterogeneity analysis indicates that the effects of data center green transformation on carbon emissions vary significantly between central and western regions and non-interprovincial border areas. This research provides empirical evidence and policy recommendations to assist developing countries in balancing economic development with carbon emission reduction objectives.